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Fighting Obama’s 50% increase to Medicare Part D premiums

As Congressman Paul Ryan and Vice President Joe Biden demonstrated in their recent debate, there is a world of difference between the conservative and liberal approaches to health policy. Conservatives want to take advantage of market forces to drive down cost while retaining a high level of quality. Those on the left, including Biden and President Obama, are allergic to the idea, and there’s no better proof of that than the fight currently underway concerning the Medicare drug benefit, known as Part D.

Democrats have it out for the market-based program. And unless Republican leaders in Washington ward off attacks from the left, Americans might be robbed of one of the only parts of Medicare that isn’t in fiscal crisis.

Part D offers seniors a choice of coverage options from private providers. There are over 1,000 different prescription plans available across the country.[1] In Oregon alone, seniors have access to 30 different plans[2] costing between $15 and $119 per month, with an average cost of just $39 per month.[3]

This kind of fierce competition among insurers to offer the best deal has made the program a boon to government coffers and seniors’ pocket books.

Since it went into effect in 2006, it has cost 41 percent less than was originally expected. It enjoys an 88 percent approval rating among seniors. And beneficiaries pay monthly premiums that are almost fifty percent less than initial estimates.[4]

In other words, Medicare Part D is working for taxpayers and working for seniors — including the more than 200,000 Oregonians who participate.[5]

To be sure, many conservatives opposed Medicare Part D when it was passed under President Bush. Nonetheless, the program has proven a shining example of conservative principles in action.

Not surprisingly, liberals have fought the program at every turn. President Obama and his allies are currently trying to undermine Part D with a number of reforms that would wreak havoc with its competition-based structure.

For instance, President Obama and Democrats in Congress are trying to implement a rebate for drugs purchased for so-called “dual eligibles,” seniors who qualify for both Medicare and Medicaid. The goal here is simple: to force pharmaceutical companies to sell their drugs at below-market prices, passing the costs on to other non-dual-eligible Part D beneficiaries.

The result would be a tax on the majority of seniors who use the program. One study by the non-partisan Lewin Group found that this mandate could increase Medicare Part D premiums by as much as 50 percent.[6] That’s a bitter pill for seniors to swallow.

Republicans have their work cut out for them in opposing these reforms. But defending market-based healthcare reform goes beyond fighting for Part D.

Republicans need to embrace more plans like Congressman Paul Ryan’s “premium support” model for Medicare, which keeps costs sustainable by harnessing market forces and empowering seniors to make their own healthcare decisions. Unfortunately, as the two recent debates have proven, President Obama and his political allies are unwilling to even consider such proposals.

Indeed, they would allow Medicare to go broke. The most recent report from the Medicare Trustees shows the program’s trust fund running dry in twelve years.[7] And Obamacare’s $716 billion in Medicare cuts will hamstring healthcare providers who treat Medicare patients, causing the program to implode even sooner.

By contrast, Medicare Part D is on much more stable footing. Amazingly, per-enrollee expenditures have increased by only 1.8 percent per year over the last five years.[8] This is remarkable at a time when health care spending continues to rise as a seemingly unstoppable clip.

We’re lucky to have Republican leaders like Congressman Greg Walden, who voted for Medicare Part D and against Obamacare, and who has continually demonstrated his commitment to using conservative principles to advance health policy. We could use more of this kind of conservative leadership.

Despite the work of Democrats, Medicare Part D has been a remarkable triumph for seniors and taxpayers because it embraces the competition and choice that have long proven essential to driving down costs. As the debate about the future of Medicare continues to rage, Republicans must continue to stick up for fiscal sanity.